Trump 2.0 fears downplayed

Tariff threats from the incoming second administration of US president-elect Donald Trump may not be as detrimental to the Asian and ASEAN regions as initially feared, according to Albert Paul, chief economist of the Asian Development Bank during a discussion held Monday as part of the ASEAN+3 Economic Cooperation and Financial Stability Forum (AMRO Forum) in Korea, in collaboration with the International Monetary Fund (IMF) and the Bank of Korea (BOK).

- MARIANNE GO

According to Paul, during Trump 1.0, China exports were actually quite resilient, and even countries like Vietnam were able to provide import substitution. Thus, for Trump 2.0, the ADB economist believes, China's exposure to the US is much less, which will allow it to weather the tariff threats much better this time around.

Additionally, Paul noted, other neighboring countries might have opportunities to replace Chinese exports. He further pointed out that even with the tariff threat, it would still take some time for the new tariffs to take effect and these may only be felt in 2026.

There are fears that with Trump's renewed tariff threats to China, its trade partners in the ASEAN may suffer as well, including the Philippines.

However, according to Bangko Sentral ng Pilipinas Deputy Governor Francisco Dakila Jr., who was part of the discussion, the Philippines is not as export sensitive and is actually more reliant on the services sector.

The Philippines' business process outsourcing (BPO) sector has been contributing more to the country, with the BPO industry projected to earn $37.87 billion this year, which is a seven percent increase from 2023.

On the other hand, Philippine exports have been steadily declining. In October, the Philippines' total export sales were $6.16 billion, a 5.5 percent decrease from the same month in 2023. However, the year-to-date total export value from January to October this year was $61.83 billion, a mere 0.4 percent increase from the same period in 2023.